Abstract
This narrative study depicts the situation of a company whose founding CEO wanted to extricate the company from the interest-based borrowing and deputed its CFO to find a way out through any mode compliant to the Shari‘ah, so to retire its existing debt and also to get further financing through Islamic modes of financing. The study discusses the scenario and further the reasons and modalities of choosing a mode of financing i.e. musharakah based Term Finance Certificates (MTFCs). The study develops a deeper understanding of the transition from interest-based financing to the development of MTFC, as a financing tool and the choice of the specific type of instrument by the company.
Highlights
Journal of Islamic Business and ManagementRaising Redeemable Capital through Musharakah Term Finance Certificates (TFCs): A Case of Quasi Equity for Corporate Financing
Many well-known and established companies, besides availing lines of credit from banks, can and do raise external financing for expanding businesses through issuance of instruments, such as commercial paper, corporate bonds, or syndicated credit
Later-on the Islamic bankers discussed the possibility of buying over their loan from the conventional banks and the matter of musharakah based Term Finance Certificates (TFCs), among themselves and their product development teams
Summary
Raising Redeemable Capital through Musharakah TFCs: A Case of Quasi Equity for Corporate Financing.
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